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U.S. Manufacturing and an Emerging Mexico

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  • Edward E. Leamer
  • Chauncey J. Medberry

Abstract

This paper offers a vision of the future of trade in manufactured products between Mexico and the United States. This vision is formed from a study of the 1970 and 1985 trade patterns of OECD countries. The vision accounts directly for the proximity of Mexico and the United States, and also for the continuing wage gap between Mexico and the United States. The vision accounts indirectly for the declining level of trade barriers and for the technological improvements that are probable in a liberalized Mexico. Based on the OECD trade patterns, an emerging Mexico will present U.S. export opportunities that are a significant fraction of current U.S. production of transportation equipment, chemicals and machinery. But Mexican exports are likely to displace a substantial amount of U.S. production of apparel, footwear, pottery and leather products. This vision which is formed using 1985 data does not offer an entirely accurate description of the changes in trade between Mexico and the United States that have occurred between 1985 and 1992. It is possible that the vision is defective, but it is also possible that the Mexican liberalization is incomplete, is in its infancy, and is still under serious threat of reversal.

Suggested Citation

  • Edward E. Leamer & Chauncey J. Medberry, 1993. "U.S. Manufacturing and an Emerging Mexico," NBER Working Papers 4331, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:4331
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    Cited by:

    1. Vêlayoudom Marimoutou & Denis Peguin & Anne Peguin-Feissolle, 2009. "The "distance-varying" gravity model in international economics: is the distance an obstacle to trade?," Economics Bulletin, AccessEcon, vol. 29(2), pages 1139-1155.
    2. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    3. Edward E Leamer & Michael Storper, 2001. "The Economic Geography of the Internet Age," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(4), pages 641-665, December.
    4. Magerman, Glenn & Studnicka, Zuzanna & Van Hove, Jan, 2016. "Distance and border effects in international trade: A comparison of estimation methods," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 10, pages 1-31.
    5. Buch, Claudia M. & Kleinert, Jorn & Toubal, Farid, 2004. "The distance puzzle: on the interpretation of the distance coefficient in gravity equations," Economics Letters, Elsevier, vol. 83(3), pages 293-298, June.
    6. Juliette Milgram, 2003. "Quantitative Restrictions on Clothing Imports: Impact and Determinants of the Common Trade Policy Towards Developing Countries," Economic Working Papers at Centro de Estudios Andaluces E2003/04, Centro de Estudios Andaluces.

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